258 



is likely to be in demand, they enable the ryots to realize a 

 larger value for their produce than they would have done if 

 they had been left to their own devices. In the case of the 

 Kandu labha system, instanced above, the risks undergone 

 by the lender are probably not very great, and the greater 

 portion of the high interest charged represents the remu- 

 neration due for the trouble of collecting small sums at short 

 intervals from a number of persons and lending them out 

 again/^^ The true interest is what is obtained for loans of 

 fairly large amounts on adequate security for considerable 

 periods of time. Transactions of a genuine usurious type 

 appear, however, to be common in Malabar. Traders some- 

 times combine money-lending with trade operations whenever 

 they have money lying idle on their hands, but in such cases 

 the terms allowed are very short and repayment is punctually 

 and sometimes harshly enforced. The Moplahs, it is stated, 

 expect to make as much profit by money-lending as they 

 would do if the amount were employed in trade. From 

 inquiries I have made it appears that, taking one year with 

 another, the profits of trade amount to about 25 per cent., of 

 which about 15 per cent, goes to defray the charges including 

 the trader's subsistence and 10 per cent, forms interest on the 

 capital invested. An mteresting account of the methods of 

 dealing practised by the firms of Nattukottai Chetties settled 

 at Kariir is printed as appendix YI.-C. (4). 



91. As regards the question whether agricultural in- 

 Has agricultural in- clebtcduess as mcasurod in money value 

 debtedness increased in has increased in rcccut years, the answer 

 recent years. must Certainly be in the affirmative ; first, 



because of the great rise which has taken place in the 

 value of property of all descriptions and of the facilities 

 available, owing to fixed laws and security of property, for 

 raising money required for various purposes ; and, secondly, 

 because of the abundance of money and the growth of a 

 money economy. If, on the other hand, the question be 

 asked, whether the agricultural classes generally are more 

 in the hands of sowkars or professional money-lenders than 

 before, the answer must as decidedly be in the negative. 



^- — f — ■ — 



"' Professor Marshall points out, "A pawnbroker's business involves next to no 

 risk ; but his loans are generally made at the rate of 25 per cent, per annum or 

 more, the greater part of which is really earnings of management of a troublesome 

 business. Or to take a more extreme case : there are men in London and Paris, and 

 probably elsewhere, who make a living by lending to costermongers. The money is 

 often lent at the beginning of the day for the pui-chase of fruit and returned at the end 

 of the day at a profit of 10 per cent. ; there is little risk in the trade ; the money so 

 lent is seldom lost. Now a fartliing invested at 10 per cent, a day woWd amount to 

 a billion of pounds at the end of a year. But no man can become rich by lending to 

 costermongers, because no one can lend much in this way." 



